The premium on bonds payable account is a n
WebbDiscount on Bonds Payable is a contra liability account that is debited for the purpose of offsetting a credit on a liability account Bonds Payable and reporting the net book value, … Webb20 juli 2024 · The Premium on Bonds Payable account is "the amount by which bonds are issued in excess of their face value." What are bonds payable? When a firm issues bonds to earn cash, bonds payable are recorded. The corporation is a borrower since it is a bond issuer. As a result, just issuing the bond creates an obligation.
The premium on bonds payable account is a n
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WebbAnalyzing, journalizing, and reporting bond transactions. Johnny’s Hamburgers issued 8%, 10-year bonds payable at 85 on December 31, 2024. At December 31, 2024, Johnny reported the bonds payable as follows: Long-term Liabilities: Bonds Payable $ 300,000. Less: Discount on Bonds Payable (36,000) $ 264,000 WebbPremium on Bonds Payable a. has a debit balance. b. is a contra account. c. is considered to be a reduction in the cost of borrowing. d. is deducted from bonds payable on the …
WebbThe Premium on Bonds Payable account is a (n): Multiple Choice Revenue account. Adjunct liability account. Contra revenue account. O Contra asset account. Equity account. This problem has been solved! You'll get a detailed solution from a subject matter expert that helps you learn core concepts. See Answer WebbBonds that require payment of the full principle amount of the bond at the end of the loan term are referred to as 6% stated interest rate and 4% market interest rate Premium - …
Webb21 sep. 2024 · Premium on bonds payable is the excess amount by which bonds are issued over their face value. This is classified as a liability, and is amortized to interest … WebbThe bond premium is a scenario when investors pay more for the bond which represents a lower interest rate than what for the bond was issued for. In the cases of bonds issued at discount the difference between the face value and the interest rate being given to the bond holders proves to be an added n expense for the company.
WebbWhat is Discount on Bonds Payable? Discount bonds payable are the bonds issued at a discount by the companies and happen when the coupon rate is less than the prevailing market interest rate. Such bonds trade at a price less than their face value. Table of contents What is Discount on Bonds Payable? How does It work? Pricing of a Discount …
Webb100% (2 ratings) The Discount on bonds payable account is A Contra Liability accoumt A contra liabilit … View the full answer Transcribed image text: 20. The Discount on Bonds Payable account is: A) A liability B) A contra liability. C) An expense. D) A contra expense. E) A contra equity. Previous question Next question china dairy storage systemWebb21 mars 2024 · Premium bonds typically pay a higher interest rate than the overall market. Premium bonds are usually issued by well-run companies with solid credit ratings. grafton mewsWebb(Conversion of Bonds) Vargo Company has bonds payable outstanding in the amount of $500,000, and the Premium on Bonds Payable account has a balance of $7,500. Each $1,000 bond is convertible into 20 shares of preferred stock of par value of $50 per share. All bonds are converted into preferred stock. Instructions grafton methodWebbThe premium on bonds payable account is shown on the statement of financial position as a.a contra asset. b.a subtraction from a long-term liability. c.an addition to a long-term … chinadaily官网WebbOnce the first journal entry is prepared for the premium on bonds payable it can just be repeated each period until maturity. The simple formula to be used is: Bond Premium / … grafton metal works company producesWebbPremium on bonds payable (or bond premium) occurs when bonds payable are issued for an amount greater than their face or maturity amount. This is caused by the bonds … grafton mews chesterWebbThe Premium on Bonds Payable account is a (n): A. Revenue account. B. Adjunct-revenue account. C. Contra revenue account. D. Contra liability account. E. Adjunct-liability … china daily shanghai lockdown